'Why would businessmen pay the price of govt’s wrong policy'

The country's businessmen are paying the price of the government's wrong policy on energy, said the opposition leader of the parliament, former minister and industrialist Anisul Islam Mahmud.

"If we look at the energy sector, we can see the inefficient production of electricity. Why should I pay for the inefficiency and wrong policy of the government? Not mega projects, I needed urgent electricity," he said in a post-budget dialogue, organised by the Centre for Policy Dialogue (CPD), at a hotel in Gulshan of the capital on Sunday.

"The subsidy you [the government] are giving on electricity is not meant for the industry. The subsidy is being given for theft (system loss)," he said.

Anisul Islam said, "A company that faced a monthly gas bill of Tk2.5 crore, will now have to deal with a Tk5 crore bill. So, it will have to pay an additional Tk30 crore annually. Does it make this much profit in a year?"

Other business leaders also highlighted the fact that the cost of doing business has increased due to high fuel costs. They said the next fiscal year will be a difficult one for businesses around the country.

Highlighting the existing challenges in the garment sector, Arshad Jamal Dipu, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "Some 30 factories have been closed in the current month of June and many more will go out of business. Many of us will not be able to repay bank loans."

Regarding the proposed budget, the CPD said projections of the macroeconomic framework do not take cognizance of the current realities.

Dr Fahmida Khatun, executive director of CPD, said the proposed national budget seems far away from the underlying macroeconomic reality. As a result, there is a significant gap in the budget targets.

CPD's Distinguished Fellow Dr Debapriya Bhattacharya moderated the programme.

Debapriya said, considering the election year, the proposed budget seems unrealistic and bureaucratic. He urged the government to amend the proposed budget.

At the event, business leaders raised concerns that it will be difficult for the private sector to take loans if the government borrows too much money from the banking system in order to meet the huge budget deficit.

Economist Dr Ahsan H Mansur has expressed fear that if the government finances the deficit by printing money as an easy way, then it will fuel inflation further.

Much of EDF's money laundered abroad: Khasru

At the event, BNP leader Amir Khasru Mahmud Chowdhury said, "All the money given from the EDF (Export Development Fund) has been smuggled out of the country. Most of the fund's money ($6-7 billion) is gone for good."

"There is no scope for us to draw money from the reserve for investment. But reserve money is being given to Payara Port and Sri Lanka. It is being misused," he said.

Industrialist Anisul Islam Mahmud said, "Remittance money is not being brought to the country, because the capital flight is not being stopped. The IMF is giving us [Bangladesh] $2.5 billion over two years. We could have gotten that amount from remittances. But why can't we do that?"

"The main reason for this is not the exchange rate. Remittances are not coming to the country but going somewhere else. Last year, around 60-70% of remittances did not come to the country," he said. 

"Anarchy and irregularities will continue to prevail if people involved in big thefts and crimes are not brought to book. Things will not change here if the rule of law is not established in the country," Anisul Islam said.

BNP leader Amir Khasru said, "Currently, the economy of the country is running to provide benefits to the 1% of the population who have smuggled $100 billion out of the country. After US visa sanctions, they brought the money back to the country with a 2.5% incentive."

"Some people are trying to keep the current government in power and the government is taking decisions on their behalf. There is no good governance and accountability in the country," Kharsu said.

In response to Kharsu's remarks, Planning Minister MA Mannan said, "The Awami League government is running the country on the basis of good governance. The government is not doing anything outside the law. And if anyone feels otherwise, they can go to court."

IMF conditions largely dictate reform agenda: CPD

In her keynote presentation at the budget dialogue, Dr Fahmida Khatun, executive director of CPD, said IMF conditionalities will largely dictate the government's reform agenda.

"The shadow of IMF conditionalities, although not explicitly mentioned in the budget speech or other documents for FY24, is visible. Almost all IMF reform conditionalities under the loan have been listed as part of intended reform measures," Fahmida said. 

On behalf of the CPD, she also highlighted various reform conditions given by the IMF and the picture of progress made by the country.

Anisul Islam Mahmud said, "I am not against the IMF reform agenda. But the medicine [reform condition] which is supposed to be taken in six months, is asked to take in one month. The patient will die if consumed in a month."

"They [IMF] said the forex reserves cannot fall below $23 billion. To comply with that condition, you [the government] have restricted imports," Anisul said.